Homework Answers
1. The cost of capital is defined as weighted average of the cost of debt and equity. Hence option d is correct. All other options are incorrect and do not define the cost of capital which is the weighted average of overall cost to the company.
2. Option b which states that expenses are outflows of assets or liabilities incurred from peripheral or incidental transactions of an entity is the correct option.
3. In order for a liability to exist there must be an obligation to pay cash in the future. Liability is a future obligation arising out of past or present events .Hence option d is correct.
4. The operating cycle always is one year in duration is incorrect statement. There is no such condition. Hence option b is correct. All other options are correct.
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QUESTION 13 The cost of capital is defined as the a. simple average of the interest...
answer please MC1q4 discussion, 1 point, due 2/3 Refer to Chapter / multiple-choice question 4 below....
answer please
MC1q4 discussion, 1 point, due 2/3 Refer to Chapter / multiple-choice question 4 below. (4) According to the FASB's conceptual framework, an entity's revenue may result from a(n) A. Decrease in an asset from primary operations. B. Increase in an asset from incidental transactions. C. Increase in a liability from incidental transactions. D. Decrease in a liability from primary operations. The correct answer is D. A. A decrease in an asset from primary operations results in an expense....
plz help me w this Asap MC174 discussion, 1 point, due 2/3 Refer to Chapter I...
plz help me w this Asap
MC174 discussion, 1 point, due 2/3 Refer to Chapter I multiple-choice question 4 below. [4] According to the FASB's conceptual framework, an entity's revenue may result from a(n) A. Decrease in an asset from primary operations. B. Increase in an asset from incidental transactions. C. Increase in a liability from incidental transactions. D. Decrease in a liability from primary operations. The correct answer is D. A. A decrease in an asset from primary operations...
Central Systems desires a weighted average cost of capital of 12 percent. The firm has a...
Central Systems desires a weighted average cost of capital of 12 percent. The firm has a before-tax cost of debt of 5 percent and a cost of equity of 15.2 percent. What debt-equity ratio is needed for the firm to achieve its targeted weighted average cost of capital if the tax rate is 20%? a. 0.67 b. 0.56 c. 0.60 d. 0.40 e. 1.78
The proportions of debt and equity used to determine the weighted average cost of capital for...
The proportions of debt and equity used to determine the weighted average cost of capital for a firm is based on the market value of debt and equity outstanding. True False Question 38 (0.2 points) Saved Distinguishing between fixed and variable costs will enable one to calculate the sensitivity of EBITDA to changes in revenue. True False
Save Submit Assignment for Grading Questio Cost of Capital: Weighted Average Cost of Capital Question 6...
Save Submit Assignment for Grading Questio Cost of Capital: Weighted Average Cost of Capital Question 6 of 6 Check My Work The Cost of Capital: Weighted Average Cost of Capital The firm's target capital structure is the mix of debt, preferred stock, and common equity the firm plans to raise funds for its future projects. The target proportions of debt, preferred stock, and common equity, along with the cost of these components, are used to calculate the firm's weighted average...
Question 24 (1 point) A company wants to achieve a weighted average cost of capital of...
Question 24 (1 point) A company wants to achieve a weighted average cost of capital of 10.36%. The company has a before-tax cost of debt of 8.46% and a cost of equity of 12.26%. If the tax rate is 30%, what debt-to-equity ratio is needed for the company to achieve its target weighted average cost of capital? 0.407 0.417 0.428 0.439 0.450
Question 7 (10 points) Blue Ribbon, Inc. wants to have a weighted average cost of capital...
Question 7 (10 points) Blue Ribbon, Inc. wants to have a weighted average cost of capital of 10 %. The firm has a cost of debt of 4% and a cost of equity of 12 %. What debt-equity ratio is needed for the firm to achieve their targeted weighted average cost of capital? The firm face a tax rate of 40%. 0.50 0.26 O 0.33
Question No: 1 The overall (weighted average) cost of capital is composed of a weighted average of : a)The cost of common equity and the cost of debt b)The cost of common equity and the cost of preferred stock c)The cost of preferred stock and the cost o
Question No: 1The overall (weighted average) cost of capital is composed of a weighted average of :a)The cost of common equity and the cost of debtb)The cost of common equity and the cost of preferred stockc)The cost of preferred stock and the cost of debtd)The cost of common equity, the cost of preferred stock, and the cost of debtQuestion No: 2Which of the following is a characteristic of preferred stock?a)These stocks have not stated liquidating valueb)Dividends on these stocks can...
The weighted average cost of capital for a wholesaler: a. Is unaffected by changes in corporate...
The weighted average cost of capital for a wholesaler: a. Is unaffected by changes in corporate tax rates. b. Is the return investors require on the total assets of the firm. c. Remains constant when the debt-equity ratio changes. d. Should be used as the required return when analyzing a potential acquisition of a retail outlet. e. Is equivalent to the after tax cost of the firm's liabilities.
Ch 13: Assignment - Capital Structure and Leverage Attempts: Average: /2 5. The relationship between a...
Ch 13: Assignment - Capital Structure and Leverage Attempts: Average: /2 5. The relationship between a firm's capital structure and other company attributes As a firm takes on more debt, its probability of bankruptcy . Other factors held constant, a firm whose earnings are relatively volatile faces a chance of bankruptcy. Therefore, when other factors are held constant, a firm whose earings are relatively volatile should use debt than a more stable firm. When bankruptcy costs become more important, they...
answer please
MC1q4 discussion, 1 point, due 2/3 Refer to Chapter / multiple-choice question 4 below. (4) According to the FASB's conceptual framework, an entity's revenue may result from a(n) A. Decrease in an asset from primary operations. B. Increase in an asset from incidental transactions. C. Increase in a liability from incidental transactions. D. Decrease in a liability from primary operations. The correct answer is D. A. A decrease in an asset from primary operations results in an expense....
plz help me w this Asap
MC174 discussion, 1 point, due 2/3 Refer to Chapter I multiple-choice question 4 below. [4] According to the FASB's conceptual framework, an entity's revenue may result from a(n) A. Decrease in an asset from primary operations. B. Increase in an asset from incidental transactions. C. Increase in a liability from incidental transactions. D. Decrease in a liability from primary operations. The correct answer is D. A. A decrease in an asset from primary operations...
The proportions of debt and equity used to determine the weighted average cost of capital for a firm is based on the market value of debt and equity outstanding. True False Question 38 (0.2 points) Saved Distinguishing between fixed and variable costs will enable one to calculate the sensitivity of EBITDA to changes in revenue. True False
Save Submit Assignment for Grading Questio Cost of Capital: Weighted Average Cost of Capital Question 6 of 6 Check My Work The Cost of Capital: Weighted Average Cost of Capital The firm's target capital structure is the mix of debt, preferred stock, and common equity the firm plans to raise funds for its future projects. The target proportions of debt, preferred stock, and common equity, along with the cost of these components, are used to calculate the firm's weighted average...
Question 24 (1 point) A company wants to achieve a weighted average cost of capital of 10.36%. The company has a before-tax cost of debt of 8.46% and a cost of equity of 12.26%. If the tax rate is 30%, what debt-to-equity ratio is needed for the company to achieve its target weighted average cost of capital? 0.407 0.417 0.428 0.439 0.450
Question 7 (10 points) Blue Ribbon, Inc. wants to have a weighted average cost of capital of 10 %. The firm has a cost of debt of 4% and a cost of equity of 12 %. What debt-equity ratio is needed for the firm to achieve their targeted weighted average cost of capital? The firm face a tax rate of 40%. 0.50 0.26 O 0.33
Ch 13: Assignment - Capital Structure and Leverage Attempts: Average: /2 5. The relationship between a firm's capital structure and other company attributes As a firm takes on more debt, its probability of bankruptcy . Other factors held constant, a firm whose earnings are relatively volatile faces a chance of bankruptcy. Therefore, when other factors are held constant, a firm whose earings are relatively volatile should use debt than a more stable firm. When bankruptcy costs become more important, they...
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